Earlier this week Sir Jon Cunliffe said that crypto poses a rapidly growing threat to the global economy and should be regulated. The deputy Bank of England governor has called for tough new regulations or else Bitcoin and other cryptocurrencies could trigger a financial meltdown akin to the 2008 sub-prime crash. Mr Cunliffe warned governments to be wary of traders using digital currencies that could be worthless overnight.
Referring to the market capitalisation of the crypto-sphere, he said, “of course $2.3tn needs to be seen in the context of the $250tn global financial system.
“But as the financial crisis showed us, you don’t have to account for a large proportion of the financial sector to trigger financial stability problems sub-prime was valued at about $1.2tn in 2008.”
The banking chief added that there were “stability risks from Bitcoin that are currently relatively limited but they could grow very rapidly if, as I expect, this area continues to develop and expand at pace.
“How large those risks could grow will depend in no small part on the nature and on the speed of the response by regulatory and supervisory authorities.”
The deputy governor of the Bank of England, Mr Cunliffe, monitors cryptocurrencies for the Bank of International Settlements, the central bank of central banks.
Referring to the grim warning from the Bank of England’s deputy governor, Bitcoin expert Max Keiser said that, “Bitcoin is designed to trigger a meltdown of the current fiat money banking system.
“This is a mathematically guaranteed outcome.”
Speaking to Express.co.uk he added: “Bitcoin killed central banks.
“The Bank of England is in the second stage of the five stages of grief, the anger phase.
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“The bargaining phase will be their central bank digital currency stage and when that fails comes depression as the price tops £363,000 ($500,000) and then acceptance with the Bank of England scrambling to buy Bitcoin before it tops £727,000 ($1million) per coin.”
A senior investment and markets analyst at Hargreaves Lansdown has also warned that regulators need to address the rise of cryptocurrencies.
Susannah Streeter said that regulators have spent years of “tip-toeing” around cryptocurrencies.
Referring to the Bank of England governor’s comments about regulating the crypto-sphere, Ms Streeter claimed that his warning was the “firmest indication” they will soon step in to prevent it blowing “up in the face of the financial sector”
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She said: “Regulators and central banks are walking a tricky tightrope.
“They are recognising the need to foster new decentralised payments technology.
“However, they are also ensuring enough rules are in place to prevent runaway speculation infecting the wider financial sector.
Today the price of Bitcoin soared to hit close to $63,000.